NEW YORK: Wall Street stocks advanced on Tuesday (Jan 31), embracing a trove of mostly good earnings news and shrugging off a downcast consumer confidence report ahead of a Federal Reserve (Fed) decision on interest rates.
ExxonMobil, General Motors (GM) and United Parcel Service (UPS) were among the companies that surged following solid earnings in one of the busiest rounds of the quarterly reporting period.
That helped offset a survey from the Conference Board that showed greater unease about the about the short-term outlook for jobs and near-term business conditions.
Steve Sosnick of Interactive Brokers described the market as basically in a bullish mode, in part because of expectations the Fed will soon pivot away from its ultra-aggressive posture on inflation. “The market is assuming that the end of rate hikes is in sight,” he said.
The Dow Jones Industrial Average rose 368.95 points, or 1.09%, to 34,086.04, the S&P 500 gained 58.83 points, or 1.46%, to 4,076.6 and the Nasdaq Composite added 190.74 points, or 1.67%, to 11,584.55.
The S&P 500 tallied its first January increase since 2019, gaining 6.2%, while the tech-heavy Nasdaq jumped 10.7% for the month – its biggest January percentage rise since 2001.
Tuesday’s gains came as the Fed kicked off a two-day policy meeting expected to culminate in a quarter-point interest rate increase on Wednesday.
Aside from the Fed's rate decision, chair Jerome Powell's news conference will be scrutinised for whether the rate-increasing cycle may be coming to a close and for signs of how long rates could stay elevated.
“Jerome Powell and team are probably looking at this easing of financial conditions that has happened over the last month, and we will see if they try to push back against it to any extent,” said Mona Mahajan, senior investment strategist at Edward Jones. “I don’t think they would want markets to move up too far, too fast either.”
Among individual companies, GM soared 8.3% after reporting better-than-expected profits and projecting strong results in 2023 as supply chain problems abate.
But Caterpillar fell 3.5% as it reported lower than expected profits that were dragged lower by operating costs.
ExxonMobil shares rose 2.2% after the oil major posted a US$56 billion net profit for 2022, setting not only a company record but a historic high for the Western oil industry.
UPS shares climbed 4.7% after its quarterly profit topped estimates. – AFP, Reuters
Source: The Sun Daily
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